Ackman, who manages $4.8 billion and whose investment ideas are widely watched in financial markets, said he is shorting the group that leases single tenant properties to retail chains because he is worried about tenant quality, the location of the properties and the company’s ability to pay monthly dividends.

In a report entitled O No! -- playing on the Realty Income’s ticker symbol -- Ackman told investors “we believe that Realty Income’s current shareholders are not being sufficiently compensated for the company’s tenant risk.”

Ackman’s Pershing Square Capital Management sent the report to its investors on Friday and a copy of the report was obtained by Reuters.

Ackman, whose family has deep roots in the real estate market, makes only a handful of bets at a time and currently invests in retailer Target Corp (TGT.N), payroll servicing company Automatic Data Processing (ADP.O) and shopping mall REIT General Growth Properties Inc. GGWPQ.PK

Realty Income Corp, leases space to convenience stores and casual restaurants including Sports Authority and Friendly’s and Ackman’s Pershing Square believes the current 97 percent occupancy rate to drop. Pershing Square’s research note said that some tenants have already filed for Chapter 11 bankruptcy protection and that there is a concern they might be forced to liquidate.

The hedge fund firm also said it is worried about the company’s limited transparency -- for example Realty Income Corp declined to disclose its tenants on a conference call with analysts. Without knowing the tenants’ names, Pershing Square said it is nearly impossible to value the company and its associated risks.

In the last month, Realty Income’s stock price has dropped 10.54 percent. (Reporting by Svea Herbst-Bayliss, editing by Leslie Gevirtz)